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EU Fines Window Hardware Manufacturers

The European Commission has fined nine European producers of window hardware a total of €86 million (about $114 million) for operating a cartel by which they agreed on common price increases in breach of EU antitrust rules. The collusion lasted from November 1999 to July 2007 and affected European buyers of windows throughout Europe, according to the commission.

The companies named are Roto, Gretsch-Unitas, Siegenia, Winkhaus, Hautau, Fuhr, Strenger of Germany, Maco of Austria and AGB of Italy. Roto received full immunity from fines, as it was the first to provide information about the cartel. The fine for Gretsch-Unitas was reduced by 45 percent and the fine for Maco by 25 percent in view of their cooperation in the investigation, officials note.

The cartel was said to be well organized with meetings following a regular pattern. Every year in the third week of November, the parties met at the occasion of trade association meetings in Germany. In the morning before the official meetings, the parties sat together in order to set a price increase for the following year or to agree on a surcharge for raw material costs, it is charged.

In the course of the following year, those companies participating in the cartel met again to inform each other about the various steps they had taken to implement the agreed price increase. Local sales representatives all over Europe also had regular contacts to ensure the success of the cartel, EU officials state

The cartel had a direct impact on customers because the tilt/turn mountings are an important component of windows and doors sold throughout Europe, with a market estimated to be at least €1 billion ($1.3 billion). The companies involved have high combined market shares within Europe, especially for turn-and-tilt hardware, where this figure is estimated to be above 80 percent, the commission reports.

"For more than seven years, buyers of windows throughout Europe have had to face a cartel," states Joaquín Almunia, commission vice president in charge of competition policy. "We are determined to fight such illegal practices, whether they come from large multinationals or family-owned companies. While we have ensured that the fines we imposed today remain proportionate, they are high compared to the companies' turnover and will make them think twice if they ever think of fixing prices again."

In addition to the fines, commission officials note that persons or firm affected by the anti-competitive behavior can also seek damages in the courts against the companies involved.